GALENA WEST Chief of Enforcement NEAL BUCKNELL

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 31 32 1 STIPULATION, DECISION AND ORDER FPPC Case No. 15/74 GALENA WEST Chief of Enforcement NEAL BUCKNELL Senior Commission Counsel Fair Political Practices Commission 428 J Street, Suite 620 Sacramento, CA 95814 Telephone: (916) 323-6424 Facsimile: (916) 322-1932 Attorneys for Complainant BEFORE THE FAIR POLITICAL PRACTICES COMMISSION STATE OF CALIFORNIA In the Matter of: AB&I FOUNDRY, A division OF mcwane , INC., Respondent. FPPC Case No. 15/74 STIPULATION, DECISION AND ORDER STIPULATION Complainant, the Enforcement division of the Fair Political Practices Commission, and Respondent AB&I Foundry, a division of mcwane , Inc. hereby agree that this Stipulation will be submitted for consideration by the Fair Political Practices Commission at its next regularly scheduled meeting.

2 The parties agree to enter into this Stipulation to resolve all factual and legal issues raised in this matter and to reach a final disposition without the necessity of holding an administrative hearing to determine the liability of Respondent pursuant to Government Code section 83116. Respondent understands, and hereby knowingly and voluntarily waives, any and all procedural rights set forth in Government Code sections , 11503 and 11523, and in California Code of Regulations, title 2, sections through This includes, but is not limited to the right to appear personally at any administrative hearing held in this matter, to be represented by an attorney at Respondent s own expense, to confront and cross-examine all witnesses testifying at the hearing, to /// 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 31 32 2 STIPULATION, DECISION AND ORDER FPPC Case No.

3 15/74 subpoena witnesses to testify at the hearing, to have an impartial administrative law judge preside over the hearing as a hearing officer, and to have the matter judicially reviewed. It is further stipulated and agreed that Respondent violated the Political Reform Act as set forth in Exhibit 1, which is a true and accurate summary of the facts in this matter and which is incorporated by reference as though fully set forth herein. Respondent agrees to the issuance of the Decision and Order, which is attached hereto. Also, Respondent agrees to the Commission imposing against it an administrative penalty in the amount of $100,000. One or more cashier s checks or money orders totaling said amount to be paid to the General Fund of the State of California is/are submitted with this Stipulation as full payment of the administrative penalty described above, and same shall be held by the State of California until the Commission issues its Decision and Order regarding this matter.

4 The parties agree that in the event the Commission refuses to accept this Stipulation, it shall become null and void, and within fifteen business days after the Commission meeting at which the Stipulation is rejected, all payments tendered by Respondent in connection with this Stipulation shall be reimbursed to Respondent. Respondent further stipulates and agrees that in the event the Commission rejects the Stipulation and a full evidentiary hearing before the Commission becomes necessary, neither any member of the /// /// /// /// /// /// /// /// /// /// /// /// 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 31 32 3 STIPULATION, DECISION AND ORDER FPPC Case No. 15/74 Commission, nor the Executive Director, shall be disqualified because of prior consideration of this Stipulation. Dated: _____ _____ GALENA West, Chief of Enforcement Fair Political Practices Commission Dated: _____ _____ Kurt Winter, General Manager, on behalf of Respondent AB&I Foundry, a division of mcwane , Inc.

5 DECISION AND ORDER The foregoing Stipulation of the parties In the Matter of AB&I Foundry, a division of mcwane , Inc., FPPC Case No. 15/74, including all attached exhibits, is hereby accepted as the final decision and order of the Fair Political Practices Commission, effective upon execution below by the Chair. IT IS SO ORDERED. Dated: _____ _____ Joann Remke, Chair Fair Political Practices Commission 1 EXHIBIT 1 IN SUPPORT OF STIPULATION, DECISION AND ORDER FPPC Case No. 15/74 EXHIBIT 1 INTRODUCTION In 2015, proactive efforts by the Enforcement division detected a pattern of activity that led to the opening of this case which turned into a joint investigation and prosecution with the City of Oakland Public Ethics Commission. mcwane , Inc. is a large manufacturer of iron water works and plumbing products. One of its divisions is AB&I Foundry, which is headquartered in Oakland, California.

6 For ease of reference, AB&I Foundry, a division of mcwane , Inc., simply is referred to as AB&I. ( mcwane acquired AB&I Foundry in 2006.) The Political Reform Act (the Act )1 prohibits laundered campaign contributions. This case involves 37 laundered campaign contributions by AB&I through 17 officers/employees (and their spouses) to four Oakland mayoral candidates and two city council candidates from 2012 through 2014. The total amount of these contributions was $23,900. At the time, Oakland s local contribution limit was $ This stipulation is related to a separate stipulation, which will be considered by the Oakland Public Ethics Commission on July 5, 2016 (or as soon thereafter as the matter may be scheduled). While the Oakland stipulation involves the penalty to be imposed for AB&I s violation of the city s local contribution limit, this FPPC stipulation involves the penalty to be imposed for AB&I s campaign money laundering.

7 SUMMARY OF THE LAW Need for Liberal Construction and Vigorous Enforcement of the Political Reform Act When enacting the Political Reform Act, the people of California found and declared that previous laws regulating political practices suffered from inadequate Enforcement by state and local For this reason, the Act is to be construed liberally to accomplish its One purpose of the Act is to promote transparency by ensuring that receipts and expenditures in election campaigns are fully and truthfully disclosed so that voters are fully 1 The Act is contained in Government Code sections 81000 through 91014. All statutory references are to the Government Code, unless otherwise indicated. The regulations of the Fair Political Practices Commission are contained in Sections 18110 through 18997 of Title 2 of the California Code of Regulations.

8 All regulatory references are to Title 2, division 6 of the California Code of Regulations, unless otherwise indicated. 2 The Oakland Campaign Reform Act includes contribution limits, which are subject to a cost of living adjustment each year by the City Clerk. (Oakland Municipal Code, ) In 2012 and 2014, the applicable contribution limit was $700. 3 Section 81001, subdivision (h). 4 Section 81003. 2 EXHIBIT 1 IN SUPPORT OF STIPULATION, DECISION AND ORDER FPPC Case No. 15/74 informed and improper practices are Along these lines, the Act includes a comprehensive campaign reporting system and the true sources of campaign contributions may not be Another purpose of the Act is to provide adequate Enforcement mechanisms so that the Act will be vigorously enforced. 7 Prohibition Against Campaign Money Laundering No campaign contribution may be made in the name of another This prohibition helps keep the public informed as to the actual sources of campaign contributions and helps to prevent circumvention of campaign contribution limits.

9 When a person makes a contribution on behalf of another, that person s intermediary relationship with the actual donor must be disclosed to the recipient of the contribution and the recipient s campaign filings must disclose both the intermediary and the actual SUMMARY OF THE FACTS In connection with Oakland s 2012 and 2014 elections for city council and mayor, a local contribution limit was in effect, which prohibited AB&I from contributing more than $700 to each candidate. However, AB&I circumvented this limit by offering to reimburse certain individuals for making contributions in their own names to various candidates. These individuals who agreed to serve as undisclosed intermediaries for AB&I were company officers/employees and their spouses. AB&I collected contribution checks from the intermediaries. Each check was in the amount of $700 (with only a few exceptions). Each intermediary was fully reimbursed by AB&I for his or her contribution.

10 Generally, after AB&I collected the checks for a particular candidate, the company would provide the checks to the candidate s committee. Usually, AB&I would include a contribution check of its own, often in the amount of $700. /// /// /// /// /// /// 5 Section 81002, subdivision (a). 6 Sections 84200, et seq. and 84301. 7 Section 81002, subdivision (f). 8 Section 84301. 9 Section 84302. 3 EXHIBIT 1 IN SUPPORT OF STIPULATION, DECISION AND ORDER FPPC Case No. 15/74 In this way, AB&I made approximately 37 contributions in the names of 17 intermediaries to the following six committees (not counting contributions that AB&I made in its own name): Recipient Total De La Fuente for City Council 2012 $6,300 Joe Tuman for Mayor 2014 $6,300 Desley Brooks [for City Council 2014] $2,100 Re-Elect Mayor Quan 2014 $2,100 Parker for Oakland Mayor 2014 $2,500 Kaplan for Oakland Mayor 2014 $4,600 Total: $23,900 Desley Brooks won her election.